Building Trends Over the Decades in the Phoenix Logistics Market 

This summer, EA announced our exploration of Uber hexagons to enhance our analysis of logistics markets, focusing on Phoenix throughout the series.

Using Uber H3 hexagons as a base unit of aggregation, we built a heatmap showing the density of industrial square footage in the Phoenix market. Initially, we plotted the distribution of average building sizes in square feet. Many warehouses in the Phoenix market are under 100,000 square feet, reflecting an existing inventory that predates the trend toward larger and taller structures.

In this chart, we clearly see that smaller buildings are the norm for this and other markets.

The scatter plot shows the relationship between building age and size, as well as age and ceiling height, reiterating that the trend toward larger buildings is more recent.

We begin our heat mapping with an analysis of the current square footage of the logistics market. Since both average building size and average clearance height have increased over time, the distribution plot reads like a chronological timeline. A large quantity of smaller buildings from the early market through the late 1990s gives way to exponential growth in average ceiling height per hexagon after 2000.

The 30-foot barrier held for some time, but once surpassed, height growth accelerated. The same is true for average building size. Many hexagons remained below the 400,000 square foot threshold until around 2000, after which the number of hexagons with averages above 400,000 exploded. While many smaller buildings continue to be built, these are being supplemented by a significant population of larger structures.

What role does age play in determining the number of buildings in the market and informing the average height and size? As shown below, much of Phoenix’s inventory was built before 2000. While construction accelerated in the 2000s, pre-1990 buildings still account for nearly half of the market's inventory. However, after the Global Financial Crisis, the average building size expanded dramatically.

Our heatmap reveals many hexagons with smaller buildings, with Phoenix's industrial market concentrated around key transportation corridors like the I-10 and I-17. Notable areas include the West Valley, particularly around Goodyear and Glendale, and the East Valley, mainly Chandler, Tempe and Gilbert. This concentration reinforces the idea that industrial activities are heavily influenced by logistical efficiencies, with these areas likely serving as strategic hubs. The larger square footage density, denoted in yellow, is concentrated near Sky Harbor Airport, as well as on the I-10 which connects the region to Southern California.

We believe the graphs using hexagons have given us a better understanding of the overall structure of the market beyond historical methods of market and submarket analysis.  But perhaps more importantly, we have unearthed significant insights about the relationship between age, height and size, highlighting which areas of the market benefit from this trend.

Bonus map: Where are the buildings being built for the tallest average clearance heights?

Stay tuned for the next iteration of this hexagon series.